What is Retrenchment?
Process of a company or organization to reduce the number of people in its employment in order to match or meet operational requirements.
Reasons of Retrenchment?
•Employment Redundancy
•Overstaffing
•Increased Labour Costs
•Technology
•Merger or Liquidation
Strategies for Redundancy
•Downsizing
•Voluntary Retirement
•HR Outsourcing
•Early Retirement Plans
•Project Based Employment
What is Downsizing ?
Make a company or an organization smaller by eliminating staff positions
What is Downsizing ?
A company's reduction in the number of employees, number of bureaucratic levels, and overall size in an attempt to increase efficiency and profitability.
What is Layoff ?
Layoff also called redundancy is the temporary suspension or permanent retrenchment of an employee or a group of employees for business reasons, such as when certain positions are no longer necessary or when a business slow-down occurs.
What is Pink slip ?
Pink Slip refers to a practice by personnel department, of including a discharge notice in an employee's pay envelope to notify the Employee of his or her retrenchment of employment or layoff
Why Downsizing ?
•Cost Reduction•Business Requirements•Merger•Reorganization•Unproductive Resources•Recession
Major Downsizing Companies
•HSBC-25000•G Motors-1 lac in 11 years•Boeing 55k in 5 years•GE-100k in 10 years•Citigroup-1200•Cisco 1300•Kraft food 1600•Pepsi 8700•IBM -9000•HP-27000
Strategy of Implementing Downsizing
•Communication•Preserving Dignity•Counseling to Employees•Legal Formalities•Appropriate Notice•Immediate or Staggered
Voluntary Retirement Schemes is form of early retirement that is initiated by employers. Comprehensive compensation packages may be offered to number of employees.
What is VRS?
•Excess Manpower
•Maintaining Profitability
•Unproductive Manpower
•Competition
•Takeover/Merger
What Could be the Reasons of offering VRS?
•Eligible Age
•Only Employees/Workers
•Compensation on VRS
•Restrict Service
•Income Tax Exemption
•VRS Acceptance
•Periodicity
General Application for VRS
HR Outsourcing
Today, over 70% of allBusinesses outsourceone or more elements of their business.
Outsourcing
Outsourcing means to delegate or authorize someone to act or perform on your behalf either at your place or outside
Outsourcing
1 Decreasing revenues and uneven cash flow
2. Increasing layoffs and rising lawsuits
3. Increasing operating Expenses
4. Reduced productivity and lower morale
5 Cost Effectiveness
6 Specialization
Why Outsourcing
• Necessitate Firing Employee
• Losing Jobs to Outsiders
• Losing Control Over Business
• Sharing Secrecy
Misconception about Outsourcing
• Overhead---52%
• Expertise----41%
• Core Competencies-33%
• Reduce Headcount—30
• Reduce Risk -22%
HR Outsourcing- Industry Drivers
• Payroll Processing• HR Administration/Compliance• Workers Compensation• Risk Management• Recruiting & Staffing
HR Outsourcing-variations
Early Retirement Plan
A retirement plan which allows an employee to retire before the company's official retirement age.
Early Retirement Plan-objectives
Reduction in Cost
Focus on Priorities
Early Retirement Plan- application
•Age Eligibility
•Compensation
•Withdrawal
Project Based Employment
Employing Manpower on a temporary basis or contract for a stipulated period or length of the Project may be called Project Based Employment
Project Based Employment-types
•Project Based Fixed term•Casual Employment•Probationary Employment•Regular Or Permanent
Contract-terms
•Fixed term•Open Ended•Project Based•Expert’s
Turnaround
A sharp, positive reversal in the performance of a company or the overall market.
Strategy for Turnaround
•SWOT Analysis•Re-engineering•HR Strategies•Production/Operation Strategies•Financial Strategies•Marketing Strategies•Corporate Strategies
Strategy for Retrenchment
•Legal Formalities•Counseling•Compensation•Communication•Appropriate Notice•Sabbaticals•Lowering Wages/Freezing•Alternative Employment•Evaluating Impact•Least Productive Manpower•Relieve with Dignity•Intellectual Capital
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